Taxes, and google adsense

[bob005]

Not sure if this is the right spot to ask this. I've been lurking here for a while and thought this would be a good time to register.
I've been making roughly a few hundred dollars a month off my website using google adsense ads. When i signed up with google they made my give them a SSN. I know i will have to pay the taxes for these ads but i'm still wondering some stuff.
First off will they (google) send me some type of form at the end of the year?
I was also wondering about how i would file this? I'm not a business owner, so i dont have any type of business id number or license. Will i be forced to get some type of business license for this income? I read something about submitting a W-9 form on googles website but i dont know exactly what this is for. Do i need to do this if i already have a SSN?

Thank you for your help

[tacimala]

I agree with keyplyr on talking to a professional in your area regarding this matter. Tax and income laws vary from state to state, so some advice you may receive may not be true in your state. If you are making upwords of $200 a month every month while only doing this as an individual instead of a business you may even be interested in making this into a business because then you can write off many expenses to help you pay less taxes. (i.e. server costs, domain registration, computer parts, mileage expenses to and from the bank/post office, etc.)

What site are you running AdSense on?

[rdmorss]

I work for H&R Bl**k during the tax season. Not knowing the facts and circumstances of your situation, I would venture the following general information. (Talk to a tax pro so he/she can go over your exact situation.)

I don't think Google will send you a W-4, since you are not an employee of Google when you use AdSense. I doubt they do any income tax withholding, which is the purpose of the W-4 - to declare how many allowances you want.

I would expect that you would be classified as self-employed when you use Google AdSense, and will probably receive a 1099-MISC from Google showing how much money they paid you in 2005. A copy of this 1099 form will also be sent to the IRS, so you definitely want to report the income on your tax return because IRS computers will cross check.

Google uses the W-9 form to request from you your Taxpayer Identification Number (TIN), which they then use to fill out the 1099-MISC form at year's end. Since you are an individual your TIN is your Social Security No.

I suggest you look into Schedule C (Sole Proprietorship) and Schedule SE (Self-Employment Tax). You will have to pay self-employment tax if your NET income from self employment is more than $400 for the year. You can reduce your SE tax by deducting your business expenses from your gross business income. There are strict rules about deductibilty of business expenses - so consult a tax pro.

[YvetteKuhns]

I've been making roughly a few hundred dollars a month off my website using google adsense ads.

You will get a report from Google and you must claim it on your federal tax return. While you may not consider this a business, this may then be considered hobby income which must be reported on line 21 of Form 1040. A hobby is defined as an activity not engaged in for profit.

http://www.irs.gov/businesses/small/article/0,,id=99239,00.html
Read this article Is it a Business or a Hobby? for more help.

I would consider this a business, because you are profitting from the Google ads and I suspect that you may be able to file a schedule C and write off domain name, web hosting and other related expenses. I have prepared taxes and was originally trained by H&R Bl**k.